TORONTO, Dec. 18, 2019 /PRNewswire/ - Denison Mines
Corp. ("Denison" or the "Company") (DML: TSX, DNN: NYSE
American) is pleased to report the completion of the highly
successful 2019 In-Situ Recovery ("ISR") field test program within
the high-grade Phoenix uranium
deposit ("Phoenix") at the Company's 90% owned Wheeler River
Uranium Project ("Wheeler River"), located in northern Saskatchewan, Canada. The Company is also
pleased to announce the initiation of the next phase of ISR
metallurgical laboratory testing for uranium recovery (as outlined
below), which will utilize the mineralized drill core recovered
through the installation of various test wells during the ISR field
test program. View PDF Version.
The ISR field test program was designed to validate the
permeability of Phoenix, and to
collect an extensive database of hydrogeological data to further
evaluate the ISR mining conditions present at Phoenix. This
data is of critical importance to the advancement of Phoenix as an ISR mining operation – it is
expected to de-risk the ISR requirements related to permeability
and is to be further incorporated into a detailed ISR mine plan as
part of the completion of a future Feasibility Study ("FS"). The
ISR field test program included preliminary hydrogeological tests
completed by using a series of small diameter and large diameter
test wells to move water through two test areas defined within the
Phoenix ore zone (see Figure 1).
Measurements of the movement of water (hydraulic pressure
changes) within the ore zone provide evidence of the hydraulic
conditions present and are indicative of the potential movement of
mining solution flow in an ISR mining operation. Additional
supportive test work completed during the program included
permeability and porosity tests conducted either downhole or on
mineralized drill core recovered during the test program.
The ISR field test successfully achieved each of the program's
planned objectives, and is highlighted by several key de-risking
accomplishments, including the following:
Confirmation of significant hydraulic connectivity within the
Phoenix ore zone:
- 85% of test wells located within Test Area 1 and Test Area 2 of
the Phoenix deposit showed
hydraulic connectivity with another test well (see Figure 2 and
Figure 3);
- Hydraulic connectivity was observed over 77% of the total
strike length tested in Test Area 1 and Test Area 2 combined, and
over 100% of the total across-strike length tested;
- Taken together, the extent of hydraulic connectivity observed
during the ISR field test program is supportive of the permeability
of the ore zone and the potential suitability for ISR mining.
Installation of the Athabasca Basin's first Commercial Scale Wells
("CSWs") for ISR:
- ISR mining of the Phoenix
deposit is expected to require the installation of approximately
300 large-diameter/commercial-scale vertical wells into and
surrounding the Phoenix deposit at
approximately 400 metres below surface;
- The installation of CSW1 (GWR-031) and CSW2 (GWR-032) represent
a historic milestone for the advancement of ISR mining within the
Athabasca Basin – as the first
wells to have been installed for the purpose of ISR mining (see
Figure 2 and Figure 3);
- Completion of these wells represents a notable de-risking
accomplishment for the project, as it confirms the ability to drill
the large-diameter holes and install the materials necessary for
ISR mining in a complex and highly altered geological setting that
has not previously been tested for the suitability of the
installation of ISR wells.
Confirmation of limited hydraulic connectivity within the
underlying basement units:
- During preliminary tests in Test Area 1 and Test Area 2,
negligible hydraulic responses were observed in the observation
wells situated in the basement rock units underlying the
Phoenix deposit;
- This result is indicative of the basement units having
relatively low permeability and is supportive of the PFS design for
the Phoenix ISR operation, which relies on the basement units
providing containment of the ISR mining solution in conjunction
with the planned freeze dome.
Demonstration of the effectiveness of MaxPERF to increase CSW
access to existing permeability:
- The MaxPERF Drilling Tool was successfully deployed in CSW1 and
CSW2 to create a series of lateral drill holes (penetration
tunnels) roughly 0.7 inches (1.78 centimetres) in diameter, which
extend up to 72 inches (1.83 metres) from the CSW;
- Initial short-duration hydrogeological tests confirmed
increased flow rates in Test Area 1 following the completion of the
MaxPERF drilling (see Denison's press release dated August 27, 2019). In Test Area 2, initial
short-duration hydrogeological tests confirmed similar flow rates
both before and after the completion of the MaxPERF drilling
(described in this press release);
- These results confirm that the MaxPERF Drilling Tool can be
deployed successfully within a CSW to mechanically engineer
increased access to the existing permeability of the ore formation.
This tool could be of significant utility in areas of the
Phoenix deposit where natural
permeability is challenged.
David Bronkhorst, Denison's Vice
President Operations, commented, "We are pleased to have safely
and successfully completed this first-of-its-kind ISR testing
program at Phoenix – as Denison
advances its industry leading efforts to pioneer ISR mining in the
Athabasca Basin. The positive technical results obtained from
the ISR field tests align with the Company's expectations that the
Phoenix ore zone has significant
permeability and is suitable for ISR mining. Considerable
operational milestones have also been achieved during the field
test program, including the installation of the first Commercial
Scale Wells designed for ISR mining in the Athabasca Basin, which are expected to meet
environmental and regulatory standards. Additionally, the
successful testing of the MaxPERF Drilling Tool, to increase access
to existing permeability, introduces the prospect of normalizing
geological variations in a production environment.
With the successful completion of the ISR field testing
program, and the recovery of significant mineralized drill core
from the Phoenix ore zone, our
focus has now shifted to advancing the metallurgical test work
required to support our leachability reports in the PFS, and to
collect additional specialized metallurgical test data to
facilitate the completion of a future Feasibility Study"
Completion of the 2019 ISR Field Test Program
Following the operational update provided in Denison's press
release dated October 31, 2019, the
Company successfully completed the remaining planned field test
work and safely concluded operations on site at Wheeler River for
the year. The field activities associated with the 2019 ISR
field test program were completed over a period of approximately 23
weeks (starting in June and completed in late November), and
required the support of roughly 40 Denison employees and contractor
staff.
The objectives of the program were extensive, and the scope of
the work completed on site during the program was
considerable. The key components of field work completed as
part of the 2019 ISR field test program are summarized in Table 1
below.
The extensive hydrogeological data sets collected during the
2019 field program will be incorporated into the hydrogeological
model being developed for Phoenix,
which will facilitate detailed mine planning as part of a future
FS. The hydrogeological testing and modelling are being undertaken
by Petrotek Corporation ("Petrotek") – specialists in the technical
evaluation and field operation of subsurface fluid flow and
injection projects, including significant ISR experience in various
jurisdictions. Denison expects the hydrogeological model and final
report to be completed in Q1 2020, which will allow for detailed
planning for further ISR field testing and will ultimately support
the completion of a future FS.
Raw data has been received for all the supportive permeability
and porosity test work completed and is currently undergoing QA/QC
and processing. Final data will be analyzed and integrated into the
hydrogeological model to better define areas of the deposit
contributing to fluid flows.
Metallurgical Laboratory Test Program:
Utilizing the mineralized drill core recovered from the 2019 ISR
field test program, the Company has commenced the next phase of ISR
metallurgical laboratory testing for uranium recovery. The
metallurgical laboratory test program builds upon the laboratory
tests completed for the recovery of uranium as part of the PFS and
is expected to increase the overall confidence of the application
of ISR. The results are expected to facilitate detailed mine
and process plant planning as part of a future FS, and will provide
key inputs for the Environmental Assessment ("EA") process. The
laboratory work is being carried out at the Saskatchewan Research
Council ("SRC") Mineral Processing and Geoanalytical Laboratories
under the supervision of Mr. Chuck
Edwards (P.Eng., FCIM). Significant components of the
metallurgical laboratory test program include core leach tests,
column leach tests, bench-scale tests and metallurgical modelling,
as summarized in Table 2 below.
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Table 1: Summary
of work completed as part of the 2019 ISR field
test.
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Installation of 4
small-diameter pump/injection ("P/I") wells with a 2.5-inch
diameter PVC pipe and slotted well-screen set within the ore zone
of Test Area 1 and Test Area 2.
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Installation of 5
small-diameter observation wells with a 1.5-inch diameter PVC pipe
and slotted well-screen set at various depths within the ore zone
of Test Area 1 and Test Area 2.
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Installation of 6
small-diameter observation wells with a 1.5 inch diameter PVC pipe
and slotted well-screen set at various depths outside of the ore
zone of Test Area 1 and Test Area 2, including wells situated
in the basement formation below Phoenix and in the sandstone above
and adjacent to Phoenix.
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Installation of 2
test wells containing Vibrating Wire Piezometers ("VWPs") in each
of Test Area 1 and Test Area 2, equipped with pressure transducers
at five different depth locations – including the overburden (1
transducer), overlying sandstone (2 transducers), ore zone (1
transducer), and underlying basement (1 transducer).
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Installation of 12
small-diameter regional observation wells with a 1.5 inch diameter
PVC pipe and slotted well-screen set at various depths and located
approximately between 100 metres and 700 metres outside of the
boundaries of the ore zone at Phoenix, for the purposes of
environmental monitoring and baseline data collection.
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Installation of 1
re-charge well with a 2.5-inch diameter PVC pipe and slotted
well-screen set within the ore zone horizon for the purposes of
recharging formation test waters.
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Completion of a
series of short-duration preliminary hydrogeological tests, using
the P/I wells to pump water from or inject water into the ore zone
to collect hydrogeological data and identify hydraulic connectivity
between test wells – validating the ability to move water, and the
existence of significant permeability, within the Phoenix ore
zone.
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Installation of 2
large-diameter CSWs within the ore zone – one located in each of
Test Area 1 and Test Area 2 and both designed to meet expected
regulatory and environmental requirements such that they can
ultimately form part of the production ISR well field at
Phoenix.
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Completion of a
series of short-duration preliminary hydrogeological tests, using
the CSWs to pump water from or inject water into the ore zone to
collect further hydrogeological data and assess the extent of
permeability prior to testing the MaxPERF Drilling Tool.
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Deployment of the
MaxPERF Drilling Tool in each of CSW1 and CSW2 to complete an array
of lateral drill holes (penetration tunnels) designed to enhance
access from each CSW to the existing permeability within the ore
zone.
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Completion of a
further series of short-duration preliminary hydrogeological tests,
using each of CSW1 and CSW2 to pump water from or inject water into
the ore zone following the deployment of the MaxPERF Drilling Tool
– indicating potential increased flow rates following the
application of the MaxPERF drilling.
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Completion of
long-duration hydrogeological tests, using each of CSW1 and CSW2 to
pump water from or inject water into the ore zone for an extended
period of time, to collect further detailed hydrogeological data
designed to simulate fluid flow under conditions similar to an
envisioned commercial production environment.
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Completion of
approximately 23 individual hydraulic conductivity tests (downhole
packer testing) in 15 boreholes at various depths within and
adjacent to the ore zone of Test Area 1 and Test Area 2 – including
hydraulic conductivity tests within the underlying basement
formation below Phoenix and in the sandstone above and adjacent to
Phoenix.
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Completion of
downhole geophysics including nuclear magnetic resonance, dual
neutron, and cement-bond log in CSW2 and dual neutron in GWR-001,
GWR-010, GWR-019 and GWR-022.
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Recovery of
approximately 100 metres of mineralized drill core in 14 individual
drill holes from the installation of P/I and observation wells, as
well as CSWs, within Test Area 1 and Test Area 2 – subject to
detailed on-site geological and geotechnical logging as well as
permeability (permeameter) testing, prior to portions of the core
being preserved for laboratory-based metallurgical test
work.
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Completion of
extensive permeameter testing in the field, utilizing a portable
nitrogen gas probe permeameter adapted for testing whole drill core
pieces. Permeameter measurements were taken on core at approximate
10 centimetre intervals, resulting in a total of over 1,200
measurements collected from the 2019 ISR field test
program.
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Table 2:
Significant components of the metallurgical laboratory test
program.
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Core Leach
Tests: These specialized tests involve the testing of
intact mineralized core samples, representative of the in-situ
conditions at Phoenix, to evaluate uranium recovery specifically
for the ISR mining method. Mineralized core samples of between 0.75
metres and 1.5 metres in length were obtained from the 2019 ISR
field test program. A triple-tube method of core recovery was
employed to ensure the core could be recovered with minimal
breakage and would be representative of the in-situ Phoenix ore.
Core samples were collected to represent the various ore types and
grade ranges (~1% to 60% U3O8) at
Phoenix.
Specialized
laboratory apparatus will be utilized to completely seal the outer
diameter of the intact mineralized core and then allow for leach
testing through an intact core sample (25 centimetres to 50
centimetres in length). The tests are expected to utilize
concentrations of mining solutions and injection pressures similar
to those envisaged during commercial ISR operations. The tests are
expected to provide detailed metallurgical recovery data for the
start-up, steady state, and closure of ISR
wells.
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Column Leach
Tests: Additional core samples in the same grade ranges
(~1% to 60% U3O8) were obtained from the 2019
ISR field test program and preserved for metallurgical tests.
These samples will be crushed and packed into test columns at the
test facility in order to complete traditional column leach tests
utilizing the same mining solutions as the Core Leach Tests.
The testing is expected to provide additional data on the recovery
of uranium, and any other metals, from the various ore types and
grade ranges associated with the Phoenix deposit under the
envisaged ISR mining conditions. The purpose of the Column
Leach Tests is to correlate data from the specialized Core Leach
Tests to the traditional ISR laboratory testing methods used during
the PFS. Additionally, the Column Leach Tests are able to
generate uranium bearing solutions in larger quantities for further
laboratory testing of the process plant flowsheet.
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Bench-Scale
Tests: Upon completion of the Core Leach Tests and Column
Leach Tests (together, the "Leach Tests"), Bench-Scale Tests of
each unit operation in the proposed flowsheet is planned.
These tests are expected to use the uranium-bearing solution
produced from the Leach Tests. The data from the Bench-Scale
Tests will provide key details to proceed with the next stage of
process plant design for impurity removal, uranium precipitation,
solid liquid separation, reagent usage and water
treatment.
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Metallurgical
Modelling: Concurrent with these tests, Denison is
building a metallurgical simulation model with the basic parameters
for mass, energy and water balances. The data from all
laboratory tests will be incorporated into a model update once
testing is completed.
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About Wheeler River
Wheeler River is the largest undeveloped uranium project in
the infrastructure rich eastern portion of the Athabasca Basin region, in northern
Saskatchewan – including combined
Indicated Mineral Resources of 132.1 million pounds
U3O8 (1,809,000 tonnes at an average grade of
3.3% U3O8), plus combined Inferred Mineral
Resources of 3.0 million pounds U3O8 (82,000
tonnes at an average grade of 1.7% U3O8). The
project is host to the high-grade Phoenix and Gryphon uranium deposits,
discovered by Denison in 2008 and 2014, respectively, and is a
joint venture between Denison (90% and operator) and JCU
(Canada) Exploration Company
Limited (10%).
A PFS was completed for Wheeler River in late 2018,
considering the potential economic merit of developing the
Phoenix deposit as an ISR
operation and the Gryphon deposit as a conventional underground
mining operation. Taken together, the project is estimated to
have mine production of 109.4 million pounds
U3O8 over a 14-year mine life, with a base
case pre-tax NPV of $1.31 billion (8%
discount rate), Internal Rate of Return ("IRR") of 38.7%, and
initial pre-production capital expenditures of $322.5 million. The Phoenix ISR operation is
estimated to have a stand-alone base case pre-tax NPV of
$930.4 million (8% discount rate),
IRR of 43.3%, initial pre-production capital expenditures of
$322.5 million, and industry leading
average operating costs of US$3.33/lb
U3O8. The PFS is prepared on a project
(100% ownership) and pre-tax basis, as each of the partners to the
Wheeler River Joint Venture are subject to different tax and other
obligations.
Further details regarding the PFS, including additional
scientific and technical information, as well as after-tax results
attributable to Denison's ownership interest, are described in
greater detail in the NI 43-101 Technical Report titled
"Pre-feasibility Study for the Wheeler River Uranium Project,
Saskatchewan, Canada" dated
October 30, 2018 with an effective
date of September 24, 2018. A
copy of this report is available on Denison's website and under its
profile on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov/edgar.shtml.
About Denison
Denison is a uranium exploration and development company with
interests focused in the Athabasca
Basin region of northern Saskatchewan,
Canada. In addition to the Wheeler River project, Denison's
Athabasca Basin exploration
portfolio consists of numerous projects covering approximately
305,000 hectares. Denison's interests in the Athabasca Basin also include a 22.5% ownership
interest in the McClean Lake joint venture ("MLJV"), which includes
several uranium deposits and the McClean Lake uranium mill, which
is currently processing ore from the Cigar Lake mine under a toll
milling agreement, plus a 25.17% interest in the Midwest and
Midwest A deposits, and a 66.51% interest in the J Zone and Huskie
deposits on the Waterbury Lake property. Each of Midwest, Midwest
A, J Zone and Huskie are located within 20 kilometres of the
McClean Lake mill.
Denison is also engaged in mine decommissioning and
environmental services through its Denison Environmental Services
division and is the manager of Uranium Participation Corp., a
publicly traded company which invests in uranium oxide and uranium
hexafluoride.
Qualified Persons
The hydrogeological results and interpretations thereof
contained in this release were prepared by Mr. Errol Lawrence, PG (Senior Hydrogeologist), and
Mr. Aaron Payne, PG (Senior
Hydrogeologist) at Petrotek, independent Qualified Persons in
accordance with the requirements of NI 43-101.
Description of the metallurgical test program contained in
this release was reviewed by Mr. Chuck
Edwards, P. Eng., FCIM, Principal at Chuck Edwards
Extractive Metallurgy Consulting, an independent Qualified Person
in accordance with the requirements of NI 43-101.
The other technical information contained in this release has
been reviewed and approved by Mr. Dale
Verran, MSc, P.Geo, Pr.Sci.Nat., Denison's Vice President,
Exploration, a Qualified Person in accordance with the requirements
of NI 43-101.
Cautionary Statement Regarding Forward-Looking
Statements
Certain information contained in this news release
constitutes 'forward-looking information', within the meaning of
the applicable United States and
Canadian legislation concerning the business, operations and
financial performance and condition of Denison.
Generally, these forward-looking statements can be identified
by the use of forward-looking terminology such as 'plans',
'expects', 'budget', 'scheduled', 'estimates', 'forecasts',
'intends', 'anticipates', or 'believes', or the negatives and/or
variations of such words and phrases, or state that certain
actions, events or results 'may', 'could', 'would', 'might' or
'will be taken', 'occur', 'be achieved' or 'has the potential
to'.
In particular, this news release contains forward-looking
information pertaining to the following: the field test program
(including drilling) and evaluation interpretations, activities,
plans and objectives; the current and continued use and
availability of third party technologies, such as MaxPERF, as
applicable; the results of the PFS and expectations with respect
thereto; development and expansion plans and objectives, including
plans for a feasibility study; and expectations regarding its joint
venture ownership interests and the continuity of its agreements
with its partners.
Forward looking statements are based on the opinions and
estimates of management as of the date such statements are made,
and they are subject to known and unknown risks, uncertainties and
other factors that may cause the actual results, level of activity,
performance or achievements of Denison to be materially different
from those expressed or implied by such forward-looking statements.
Denison believes that the expectations reflected in this
forward-looking information are reasonable but no assurance can be
given that these expectations will prove to be accurate and results
may differ materially from those anticipated in this
forward-looking information. For a discussion in respect of risks
and other factors that could influence forward-looking events,
please refer to the factors discussed in Denison's Annual
Information Form dated March 12, 2019
under the heading 'Risk Factors'. These factors are not, and should
not be construed as being exhaustive.
Accordingly, readers should not place undue reliance on
forward-looking statements. The forward-looking information
contained in this news release is expressly qualified by this
cautionary statement. Any forward-looking information and the
assumptions made with respect thereto speaks only as of the date of
this news release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this news release to conform such information to actual
results or to changes in Denison's expectations except as otherwise
required by applicable legislation.
Cautionary Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Mineral Resources and
Probable Mineral Reserves: This news release may
use the terms 'measured', 'indicated' and 'inferred' mineral
resources. United States investors
are advised that while such terms have been prepared in accordance
with the definition standards on mineral reserves of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in
Canadian National Instrument 43-101 Mineral Disclosure Standards
("NI 43-101") and are recognized and required by Canadian
regulations, the United States Securities and Exchange Commission
("SEC") does not recognize them. 'Inferred mineral resources' have
a great amount of uncertainty as to their existence, and as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or other
economic studies. United States
investors are cautioned not to assume that all or any part of
measured or indicated mineral resources will ever be converted into
mineral reserves. United
States investors are also cautioned not to assume that all
or any part of an inferred mineral resource exists, or is
economically or legally mineable. The estimates of
mineral reserves in this news release have been prepared in
accordance with NI 43-101. The definition of probable mineral
reserves used in NI 43-101 differs from the definition used by the
SEC in the SEC's Industry Guide 7. Under the requirements of
the SEC, mineralization may not be classified as a "reserve" unless
the determination has been made, pursuant to a "final" feasibility
study that the mineralization could be economically and legally
produced or extracted at the time the reserve determination is
made. Denison has not prepared a feasibility study for the purposes
of NI 43-101 or the requirements of the SEC. Accordingly,
Denison's probable mineral reserves disclosure may not be
comparable to information from U.S. companies subject to the
reporting and disclosure requirements of the
SEC.
Figure 1: Phoenix Zone A plan view showing Test Areas and
well installations completed during 2019.
Figure 2: Plan map and long section showing Pump/Injection
wells, Observation wells and CSW1 completed for ISR field
testing in Test Area 1.
Figure 3: Plan map and long section showing Pump/Injection
wells, Observation wells and CSW2 completed for ISR field testing
in Test Area 2.
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SOURCE Denison Mines Corp.